If you own a small business here in West Palm Beach, you rely on your customers to follow through with their part of the bargain, which is to pay you for the goods or services you provide them. Even though you may understand someone being late, and you don't want to be the "bad guy," there comes a time when you have to put your business first.
You will need to initiate collection efforts in order to obtain the payment you deserve. More than likely, you want to attempt to salvage the business relationship with your customer, so you know that you need to be firm, yet understanding, at the same time.
There's more to it than that
Actually, you have certain obligations to your non-paying customers. Under the Fair Debt Collection Practices Act, you need to be careful in your interactions when attempting to collect a debt. If you violate the act, you could end up not only losing the money owed to you, but you could also face other repercussions. As you attempt to collect the debt from your customer, you may want to keep the following in mind:
- If you call your customer, keep it formal, short and non-aggressive. Avoid making the situation personal and remain calm.
- Send written communications asking for payment as well as start a "paper trail" that could come in handy if you need to take the matter to court at some point in the future. Include an invoice with each demand letter.
- If there is some question regarding the ability of your customer to pay the full amount due to unforeseen circumstances, you could negotiate a deal to accept less than owed in order to avoid spending additional time and funds going to court.
- You could send the account to a collection agency, but you won't receive the full amount since the agency ordinarily takes a percentage of the amount owed -- up to 50 percent.
- Depending on the circumstances, filing a lawsuit may be the best way to go.
Regardless of the path you take, you need to make sure that your behavior does not constitute harassment. Not only could you irreparably damage the business relationship, but you could violate the act, which would only cause you more issues. In fact, it may be more advantageous for you to gain an understanding of your rights as a creditor, the steps you may take and your obligations to your customer before moving forward with your collection efforts.